Introduction

Agricultural sector is still the largest sector of the Pakistan economy contributing almost one-fifth to the GDP and providing employment to a little less than half the total employed labor force. Trends in agriculture growth reflect that agriculture grew at an average rate of 4.4 per cent per annum during the 1990s. During the 2000 decade the rate of growth of the agricultural sector has been quite erratic, ranging between -2.7 per cent to 6.5 per cent. The pathetic performance is also on account of the fact that no investments were made in the agricultural sector that would increase the crop yield. Water which is a crucial input is quite deficient and no investments have been made in water development projects, farm to market roads, power development projects, storage and warehousing facilities, etc.

The performance of the agriculture sector was stronger than expected during 2004-05 and 2005-06; but from 2006-07 onwards agricultural growth started declining. The decline continued till 2012-13, in spite of substantial increase in support prices of agricultural products in 2008, by the previous government. Violent fluctuations in the production of five major crops occurred during the period 2003-4 to 20012-13. A high rate of growth in one year was followed by a negative growth rate in the following year. These fluctuating growth rates of major crops reflects the following: One, that Pakistan’s agriculture is totally at the mercy of the weather. Second, that the high support prices of agricultural crops announced in 2008 did nothing to boost agricultural growth. Third, poor management of the Pakistan economy.

As a result of declines in major food crops like wheat, lentils and vegetables, Pakistan is becoming food insecure. The country has been importing these products from abroad. A recent IOBM survey of major food retailers in Karachi indicated that we are importing wheat from Russia, lentils from Australia, Canada and India and vegetables from India. Major Genetically Modified (GM) producing countries are highlighted in green in Figure 1. The worrying thing is that with the exception of Russia which exports wheat to Pakistan, all countries exporting lentils and vegetables to Pakistan like Australia, Canada and India are GM producing areas.

The Applied Economics Research Centre (AERC), University of Karachi, was established in 1973. The major functions of the Centre are policy oriented Core/academic Research , Contract Research for Clients, and post-graduate teaching and providing advisory services to the government.